An 'energy budget' for your staff
A major energy supplier gives employers the opportunity to offer employees free
heating or electricity. The employee is taxed on it, but the taxable amount is
separated from the actual value of the benefit, which is usually higher.
Flat rate value of benefits
Under tax law, an employee or company director is taxed on the true value of the
benefits the employer offers. It is not the cost price of the benefit in the
hands of the employer which is considered, but the value of that benefit for the
To avoid endless discussions, some benefits are valued on a flat-rate basis. A
cheap loan, for example, or a free home. There is also such a fixed calculation
for heating and electricity, which cannot be deviated from. Not by the employer
or employee, but also not by the tax authorities.
For some time now, the provision of free electricity has been estimated at
470 euros per year (1.030 euros for managers and directors) and at 930 euros
(2.080 euros for managers and directors) for heating.
A large energy supplier recently obtained a ruling to also apply this flat-rate
valuation to a new product it is launching. In concrete terms, the employer will
conclude a contract with the energy supplier for the supply of energy and
heating to employees. The employer offers its staff an energy budget, but the
product can also fit perfectly into a so-called cafeteria plan, in which the
employee is offered several alternative forms of remuneration such as a
company car, a company bicycle, meal vouchers or warrants.
The employee who enters this system is logically taxed on a benefit in kind that
is taxed at a fixed rate (as described above).
The invoice paid by the employer (and which may be considerably higher than the
fixed value of the benefit) is fully deductible.
The employer must allocate the employees a predetermined budget, possibly
depending on the job category in which the employee is classified. In other
words, the budget can differ depending on the employees function.
If the employee decides to join the energy budget, the employer concludes a
contract with the energy supplier to supply energy to that particular employee.
There is, of course, also an agreement between the employer and the employees
regarding the principles of the heating or electricity budget. That agreement
must also contain a clause of 'prudent and reasonable person' (the former 'good
family man'). The intention is to prevent the employee from starting to heat
uselessly, leaving windows and doors open, etc. The clause allows the employer
to take action to avoid excessive energy consumption (e.g. a refusal to
participate in the future to the budget for heating or electricity).
The employee decides whether or not to subscribe to the budget.
He has an
interest in keeping his consumption as low as possible because the part of the
budget that he does not use can be paid out as salary, taxable according to the
The employee can also switch to another energy supplier at any
time and will therefore no longer fall under the budget for heating or
If the employee exceeds this budget, he must pay the difference out of his own
Please note: this additional payment is not a so-called 'personal
contribution', as is the case with a company car. If the company director or a
staff member has to pay part of the car costs himself, this is a so-called
personal contribution that may be deducted from the amount of the benefit. The
sum that your employee pays because he has exceeded his energy budget is not a
personal contribution and can therefore not be deducted from the taxable
Cost deduction versus taxable benefit
The sums paid by the employer to the energy supplier are regarded as part of
the employee's remuneration. This means that they are deductible as personnel
costs, provided they are included on the tax pay slip.
The employer will be able to deduct the amounts actually paid, while the
employee is only taxable on the (usually lower) fixed benefit valued.
the energy budget be the new 'salary car'?